November 4, 2019 - An amended complaint was filed.
June 27, 2019 - An investor in shares of Fred’s, Inc. (NASDAQ: FRED) filed a lawsuit in the U.S. District Court for the Western District of Tennessee over alleged violations of Federal Securities Laws by Fred’s, Inc. in connection with certain allegedly false and misleading statements made between December 20, 2016 and June 28, 2017.
Memphis, TN based Fred's, Inc., together with its subsidiaries, sells general merchandise through its retail discount stores and full service pharmacies.
Fred’s, Inc. reported that its Total Revenue rose from over $1.97 billion for the 52 weeks period that ended on January 31, 2015 to over $2.15 billion for the 52 weeks period that ended on January 30, 2016 and that its Net Loss for those respective time periods decreased from $28.90 million to $7.37 million.
On October 27, 2015, Rite Aid Corp and Walgreens jointly announced an agreement and plan of merger pursuant to which Walgreens would acquire Rite Aid for $9.00 per share in cash. To convince the investing public that it would receive FTC approval to complete the merger, Walgreens and Rite Aid had entered into an agreement with Fred's to sell 865 Rite Aid Corp stores for $950 million in an all-cash transaction in order to complete the Original Merger (the Fred's Asset Purchase Agreement ).
On January 30, 2017, Rite Aid Corp and Walgreens announced that they had entered into a new merger agreement (the Revised Merger ).
On June 29, 2017, Rite Aid Corp and Walgreens Boots Alliance, Inc announced that they had terminated the Revised Merger.
Following the termination of the Revised Merger, Walgreens Boots Alliance, Inc terminated the Fred's Asset Purchase Agreement.
Shares of Fred’s, Inc. (NASDAQ: FRED) declined from $21.77 per share in late 2016 to as low as $0.33 per share on June 19, 2019.
According to the complaint the plaintiff alleges on behalf of purchasers of Fred’s, Inc. (NASDAQ: FRED) common shares between December 20, 2016 and June 28, 2017, that the defendants violated Federal Securities Laws.
More specifically, the plaintiff claims that between December 20, 2016 and June 28, 2017, the Defendants made false and/or misleading statements downplaying or disputing contrary reports from journalists signaling regulatory turbulence in closing the Original Merger, as well as, the Revised Merger, and representing that inside knowledge of the FTC gave confidence that the deal would close.